FHA loans are mortgages guaranteed by the Federal Housing Administration (FHA). The FHA doesn’t actually provide the loans, private lenders do. As a government insured loan program, it enables FHA-approved lenders to take more risk with qualifying people for a loan. This provides the opportunity for more Americans to own their own home.
Who are FHA loans for?
Home Purchase
FHA loans make buying a house more affordable with competitive interest rates, low down payment requirements, and flexible credit requirements. Tailored to borrowers with lower credit scores, an FHA mortgage makes it possible to buy a home with only 3.5% down. This is a great option for borrowers who may not qualify for a conventional home loan.
These loans are a great fit for first-time homebuyers, but you may also qualify for this type of mortgage even if you’ve purchased a home before.
Mortgage Refinance
You can also refinance your home with an FHA loan. The most common FHA refinance options available are:
- FHA Simple refinance is used when you want to reduce your interest rate and/or loan term length.
- FHA Cash-out refinance allows you to take out a loan for more than your current one and receive cash back for home improvement projects, debt consolidation, etc.
- FHA Streamline refinance: if you have an existing FHA mortgage, this program offers less paperwork and faster closing as a new FHA appraisal is not required.
30-Year FHA
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What are the benefits of FHA loans?
- Low money down — as little as 3.5% down payment.
- You don’t need a high credit score.
- More flexible debt-to-income (DTI) ratio — a DTI of no more than 50% and steady employment history. Estimate your DTI by adding your monthly debt payments (such as credit card and car payments) and dividing the total by your monthly income before taxes.
- The upfront mortgage insurance premium (UFMIP) can be financed into the loan. The amount is usually equal to 1.75% of your loan amount.
- Closing costs can be added to your loan balance — which could be anywhere from 2% – 6% of the purchase price.
- Existing mortgage refinance — simple, cash-out, and streamline loan refinance options.
- FHA Loan amount is based on location.

*Additional lender fees:
$1395 UW/Admin ($0 for VA loans)
$675 typical appraisal fee (varies)
$0 origination, $0 credit report, $0 processing, $0 doc prep, $0 funding, $0 wire transfer, $0 flood certification.
Always scan the fine print for origination and/or other fees. When getting verbal quotes from lenders who don’t post rates, request they email a screenshot of their pricing to be sure it matches their verbal quote.
Some mortgage companies quote different rates based on how you were referred to them. Some of their rates also vary by loan officer and/or by branch. Upwell rates are consistent regardless of source.